Gold Spot Price Open: $1,318
Gold Spot Price Close: $1,306
Change in Gold Spot Price: -$12
Silver Spot Price Open: $21.85
Silver Spot Price Close: $21.65
Change in Silver Spot Price: -$0.20
Gold and silver posted losses on Thursday as the ECB went ahead with slashing its key interest rate. When all was said and done gold lost over ten dollars while silver lost about twenty cents.
In the immediate aftermath of the European Central Bank meeting, gold and silver made gains and reached their daily highs. Shortly thereafter, however, the euro currency began to decline, which prompted the US Dollar to make gains. The surging US Dollar ended up putting heavy downward pressure on precious metals which is the sole reason both gold and silver recorded losses on the day. The ECB cut its key interest rate by .25% and it now sits at .25%. This result was interesting because while market experts thought a interest rate cut was unlikely, a lot of the public were more or less expecting it.
Another factor helping the US Dollar make gains against the euro and precious metals was the third quarter US GDP report, which was better than expected. Third quarter GDP, on an annualized basis, was expected to have risen somewhere in the neighborhood of 2% to 2.5%. When the report was released though, markets were shocked when 3rd quarter GDP had risen by 2.8% on an annualized basis. This gives further credence to the belief that QE will be wound down before the end of the year, despite the president of the San Francisco Fed saying otherwise a day ago. However, the ECB’s slashing of their key lending rate has caused many to believe that the Fed may have more time to decide on QE, meaning we may not see QE tapering in the near future after all.
The final day of the week will yield October’s employment report, a report which will undoubtedly be watched over with intense scrutiny by investors.
